Suppose It Becomes a Common Belief Among Consumers That the Current

Multiple Choice

Suppose it becomes a common belief among consumers that the current cotton crop falls because of a drought, the price of cotton clothing will rise greatly next year. Then in the current market for cotton clothing, the

A) equilibrium price will fall and the equilibrium quantity will rise.
B) equilibrium price and equilibrium quantity will increase as demand increases.
C) equilibrium price and equilibrium quantity will decrease as demand increases.
D) demand for cotton clothing will decrease as consumers search for alternatives.
E) equilibrium price will rise and the equilibrium quantity will fall.